Attached files
| file | filename |
|---|---|
| 8-K - 8-K - COVANCE INC | a11-29017_18k.htm |
Exhibit 99.1
|
|
|
|
|
PRESS RELEASE |
|
|
|
|
|
|
|
FOR IMMEDIATE RELEASE |
|
Contact: |
|
Paul Surdez |
COVANCE REPORTS THIRD QUARTER REVENUE OF $543 MILLION,
GAAP EPS OF $0.67, AND PRO FORMA EPS OF $0.71
Princeton, New Jersey, November 2, 2011 — Covance Inc. (NYSE: CVD) today reported GAAP earnings for its third quarter ended September 30, 2011 of $0.67 per diluted share. Included in third quarter results is approximately $0.06 per diluted share in costs from the previously-announced restructuring actions, partially offset by a gain of approximately $0.01 from favorable income tax developments in the quarter. Excluding these items, earnings per diluted share were $0.71 in the quarter.
“On a consolidated basis, third quarter net revenues grew 13.9% year-on-year and pro forma operating margin (when excluding the $5.3 million of restructuring costs), expanded 10 basis points sequentially to 10.4%,” said Joe Herring, Chairman and Chief Executive Officer. “In Early Development, revenues grew 16.3% year-on-year and 3.6% sequentially to $240 million and pro forma operating margin increased to 14.6% versus 10.7% a year ago and 14.2% last quarter. We forecast another quarter of sequential growth in both revenue and operating margin for our early development services in the fourth quarter. In Late-Stage Development, revenues grew 12.0% year-on-year and 5.8% sequentially driven by the continued strong performance in our clinical development services as well as the impact from foreign exchange. As forecasted, pro forma operating margin in the segment declined slightly to 19.3%, reflecting seasonal patterns as well as the impact from significant hiring in clinical development, which had year-on-year revenue growth of 18% through the first nine months of 2011.
“On the commercial front, adjusted net orders in the third quarter were $597 million, representing an adjusted book-to-bill of 1.1. We were particularly pleased to see a significant improvement in orders in our central laboratory, which reported its highest adjusted net order quarter in over a year, as well as continued improvement in orders for our toxicology services.
“Covance now expects full-year revenue growth in the high single-digit range and pro forma earnings to be approximately $2.70 per diluted share, excluding costs associated with restructuring activities and assuming foreign exchange rates remain at September 30, 2011 levels.”
Consolidated Results
|
($ in millions except EPS) |
|
3Q11 |
|
3Q10 |
|
Change |
|
2011 YTD |
|
2010 YTD |
|
Change |
| ||||
|
Total Revenues |
|
$ |
578.9 |
|
$ |
513.3 |
|
|
|
$ |
1,654.1 |
|
$ |
1,519.0 |
|
|
|
|
Less: Reimbursable Out-of-Pockets |
|
$ |
35.6 |
|
$ |
36.3 |
|
|
|
$ |
90.6 |
|
$ |
84.9 |
|
|
|
|
Net Revenues |
|
$ |
543.3 |
|
$ |
477.0 |
|
13.9% |
|
$ |
1,563.5 |
|
$ |
1,434.1 |
|
9.0% |
|
|
Operating Income (Loss) |
|
$ |
51.0 |
|
$ |
(76.7 |
) |
— |
|
$ |
141.7 |
|
$ |
18.6 |
|
660.4% |
|
|
Net Income (Loss) |
|
$ |
40.7 |
|
$ |
(30.9 |
) |
— |
|
$ |
111.0 |
|
$ |
39.9 |
|
178.5% |
|
|
Earnings (Loss) Per Share |
|
$ |
0.67 |
|
$ |
(0.49 |
) |
— |
|
$ |
1.82 |
|
$ |
0.61 |
|
196.6% |
|
|
2011 Restructuring Costs* |
|
$ |
(5.3 |
) |
— |
|
|
|
$ |
(15.7 |
) |
— |
|
|
| ||
|
2010 Impairment Charge* |
|
— |
|
$ |
(119.2 |
) |
|
|
— |
|
$ |
(119.2 |
) |
|
| ||
|
Favorable Income Tax items* |
|
$ |
0.7 |
|
$ |
10.4 |
|
|
|
$ |
0.7 |
|
$ |
10.4 |
|
|
|
|
Operating Income, excluding items* |
|
$ |
56.3 |
|
$ |
42.5 |
|
32.5% |
|
$ |
157.4 |
|
$ |
137.9 |
|
14.2% |
|
|
Operating Margin %, ex items* |
|
10.4 |
% |
8.9 |
% |
|
|
10.1 |
% |
9.6 |
% |
|
| ||||
|
Net Income, excluding items* |
|
$ |
43.4 |
|
$ |
32.6 |
|
32.8% |
|
$ |
120.5 |
|
$ |
103.4 |
|
16.4% |
|
|
Diluted EPS, excluding items* |
|
$ |
0.71 |
|
$ |
0.50 |
|
41.8% |
|
$ |
1.97 |
|
$ |
1.59 |
|
24.0% |
|
* See attached pro forma income statements for reconciliation of GAAP to pro forma amounts.
Operating Segment Results
Early Development
|
($ in millions) |
|
3Q11 |
|
3Q10 |
|
Change |
|
2011 YTD |
|
2010 YTD |
|
Change |
| ||||
|
Net Revenues |
|
$ |
240.2 |
|
$ |
206.5 |
|
16.3% |
|
$ |
696.1 |
|
$ |
619.7 |
|
12.3% |
|
|
GAAP Operating Income (Loss) |
|
$ |
33.2 |
|
$ |
(98.5 |
) |
— |
|
$ |
87.7 |
|
$ |
(53.1 |
) |
— |
|
|
GAAP Operating Margin % |
|
13.8 |
% |
(47.7 |
)% |
|
|
12.6 |
% |
(8.6 |
)% |
|
| ||||
|
2011 Restructuring Costs |
|
$ |
(1.9 |
) |
— |
|
|
|
$ |
(6.7 |
) |
— |
|
|
| ||
|
2010 Impairment Charge |
|
— |
|
$ |
(119.2 |
) |
|
|
— |
|
$ |
(119.2 |
) |
|
| ||
|
2010 Cost Actions |
|
— |
|
$ |
(1.3 |
) |
|
|
— |
|
$ |
(8.0 |
) |
|
| ||
|
Pro Forma Operating Income |
|
$ |
35.0 |
|
$ |
22.0 |
|
59.0% |
|
$ |
94.4 |
|
$ |
74.1 |
|
27.3% |
|
|
Pro Forma OM% |
|
14.6 |
% |
10.7 |
% |
|
|
13.6 |
% |
12.0 |
% |
|
| ||||
The Early Development segment includes preclinical toxicology, analytical chemistry, clinical pharmacology, discovery support, and research products. Net revenues in the third quarter of 2011 grew 16.3% year-on-year to $240.2 million, driven by the results from our new Alnwick, UK and Porcheville, France sites. In addition, analytical chemistry, North American toxicology, and clinical pharmacology each experienced strong year-on-year growth. Foreign exchange provided 140 basis points of year-on-year revenue growth. Sequentially, revenues increased $8.4 million primarily on growth from clinical pharmacology, discovery support services, and research products.
GAAP operating income for the third quarter of 2011 was $33.2 million, and included $1.9 million in costs associated with our restructuring actions. Pro forma operating income, excluding restructuring costs, was $35.0 million in the current quarter, compared to $32.9 million last quarter and $22.0 million in the third quarter of last year. Pro forma operating margins, excluding restructuring costs in both periods as well as the asset impairment charge in 2010, were 14.6% for the third quarter, compared to 14.2% last quarter and 10.7% in the third quarter of 2010.
Late-Stage Development
|
($ in millions) |
|
3Q11 |
|
3Q10 |
|
Change |
|
2011 YTD |
|
2010 YTD |
|
Change |
| ||||
|
Net Revenues |
|
$ |
303.0 |
|
$ |
270.5 |
|
12.0% |
|
$ |
867.4 |
|
$ |
814.4 |
|
6.5% |
|
|
GAAP Operating Income |
|
$ |
56.3 |
|
$ |
55.2 |
|
2.1% |
|
$ |
168.1 |
|
$ |
177.9 |
|
(5.5)% |
|
|
GAAP Operating Margin % |
|
18.6 |
% |
20.4 |
% |
|
|
19.4 |
% |
21.8 |
% |
|
| ||||
|
2011 Restructuring Costs |
|
$ |
(2.1 |
) |
— |
|
|
|
$ |
(3.7 |
) |
— |
|
|
| ||
|
Pro Forma Operating Income |
|
$ |
58.4 |
|
$ |
55.2 |
|
5.8% |
|
$ |
171.8 |
|
$ |
177.9 |
|
(3.4)% |
|
|
Pro Forma OM% |
|
19.3 |
% |
20.4 |
% |
|
|
19.8 |
% |
21.8 |
% |
|
| ||||
The Late-Stage Development segment includes central laboratory, Phase II-IV clinical development, and market access services. Net revenues for the third quarter of 2011 grew 12.0% year-on-year and 5.8% sequentially to $303.0 million. Growth over both periods was primarily driven by the continued strong performance in clinical development coupled with a weaker US dollar. Foreign exchange provided 800 basis points of year-on-year revenue growth.
GAAP operating income for the third quarter was $56.3 million and included $2.1 million in costs associated with our restructuring actions. Pro forma operating income, excluding these costs, was $58.4 million, compared to $57.3 million last quarter and $55.2 million in the third quarter of the prior year. Pro forma operating
margins, excluding these costs, were 19.3% for the third quarter of 2011 compared to 20.0% last quarter and 20.4% in the third quarter of last year. The sequential decline in profitability was primarily due to normal seasonal factors coupled with a significant increase in staffing levels in clinical development, which more than offset a small increase in central laboratory profitability. Operating margin is expected to slightly decline in the fourth quarter due to a shift in revenue mix and continued hiring in clinical development.
Corporate Information
The Company’s backlog at September 30, 2011 grew 1.0% year-over-year to $6.08 billion compared to $6.02 billion at September 30, 2010 and $6.25 billion at June 30, 2011. Foreign exchange negatively impacted sequential backlog growth by $133 million.
Corporate expenses totaled $38.4 million in the third quarter of 2011 (including $1.4 million in restructuring costs) compared to $38.7 million last quarter (including $1.8 million in restructuring costs) and $33.4 million in the third quarter of last year.
Cash and cash equivalents at September 30, 2011 were $400 million compared to $406 million at June 30, 2011 and $389 million at September 30, 2010. Covance repaid $2.5 million in debt during the quarter and now has $90.0 million in debt outstanding, originating from borrowings related to the fourth quarter 2010 accelerated share repurchase.
Free cash flow (defined as operating cash flow less capital expenditures) for the third quarter of 2011 was $16 million, consisting of operating cash flow of $52 million less capital expenditures of $36 million. Free cash flow year-to-date was $55 million, consisting of operating cash flow of $141 million less capital expenditures of $86 million. Due to continued investment in new IT systems and infrastructure to enhance service delivery and value for our clients, we expect quarterly capital spending at or above current levels going forward.
Net Days Sales Outstanding (DSO) were 38 days at September 30, 2011 compared to 38 days at June 30, 2011 and 45 days at September 30, 2010.
The Company’s investor conference call will be webcast on November 3 at 9:00 am EDT. Management’s commentary and presentation slides will be available through www.covance.com.
Covance, with headquarters in Princeton, New Jersey, is one of the world’s largest and most comprehensive drug development services companies with annual revenues greater than $2 billion, global operations in more than 30 countries, and more than 11,000 employees worldwide. Information on Covance’s products and services, recent press releases, and SEC filings can be obtained through its website at www.covance.com.
Statements contained in this press release, which are not historical facts, such as statements about prospective earnings, savings, revenue, operations, revenue and earnings growth and other financial results are forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements including the statements contained herein regarding anticipated trends in the Company’s business are based largely on management’s expectations and are subject to and qualified by risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include, without limitation, competitive factors, outsourcing trends in the pharmaceutical industry, levels of industry research and development spending, the Company’s ability to continue to attract and retain qualified personnel, the fixed price nature of contracts or the loss or delay of large studies, risks associated with acquisitions and investments, the Company’s ability to increase order volume, the pace of translation of orders into revenue in late-stage development services, testing mix and geographic mix of kit receipts in central laboratories, fluctuations in currency exchange rates, and other factors described in the Company’s filings with the Securities and Exchange Commission including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no duty to update any forward looking statement to conform the statement to actual results or changes in the Company’s expectations.
COVANCE INC.
CONSOLIDATED INCOME STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
| ||||||||
|
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net revenues |
|
$ |
543,254 |
|
$ |
477,022 |
|
$ |
1,563,460 |
|
$ |
1,434,117 |
|
|
Reimbursable out-of-pocket expenses |
|
35,622 |
|
36,258 |
|
90,601 |
|
84,901 |
| ||||
|
Total revenues |
|
578,876 |
|
513,280 |
|
1,654,061 |
|
1,519,018 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of revenue |
|
383,347 |
|
337,698 |
|
1,095,199 |
|
1,001,574 |
| ||||
|
Reimbursable out-of-pocket expenses |
|
35,622 |
|
36,258 |
|
90,601 |
|
84,901 |
| ||||
|
Selling, general and administrative |
|
81,292 |
|
70,731 |
|
247,292 |
|
217,576 |
| ||||
|
Depreciation and amortization |
|
27,592 |
|
26,105 |
|
79,291 |
|
77,105 |
| ||||
|
Asset impairment charges |
|
— |
|
119,229 |
|
— |
|
119,229 |
| ||||
|
Total costs and expenses |
|
527,853 |
(a) |
590,021 |
(c) |
1,512,383 |
(b) |
1,500,385 |
(c) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) from operations |
|
51,023 |
(a) |
(76,741 |
)(c) |
141,678 |
(b) |
18,633 |
(c) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other expense, net: |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense (income), net |
|
343 |
|
(236 |
) |
1,640 |
|
(378 |
) | ||||
|
Foreign exchange transaction loss, net |
|
777 |
|
681 |
|
892 |
|
2,595 |
| ||||
|
Other expense, net |
|
1,120 |
|
445 |
|
2,532 |
|
2,217 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) before taxes and equity investee earnings |
|
49,903 |
(a) |
(77,186 |
)(c) |
139,146 |
(b) |
16,416 |
(c) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Tax expense (benefit) |
|
9,781 |
(a) |
(46,003 |
)(c) |
28,402 |
(b) |
(22,534 |
)(c) | ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Equity investee earnings |
|
547 |
|
253 |
|
305 |
|
926 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) |
|
$ |
40,669 |
(a) |
$ |
(30,930 |
)(c) |
$ |
111,049 |
(b) |
$ |
39,876 |
(c) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic earnings (loss) per share |
|
$ |
0.68 |
(a) |
$ |
(0.49 |
)(c) |
$ |
1.86 |
(b) |
$ |
0.63 |
(c) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - basic |
|
59,695,336 |
|
63,739,910 |
|
59,596,294 |
|
63,601,302 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted earnings (loss) per share |
|
$ |
0.67 |
(a) |
$ |
(0.49 |
)(c) |
$ |
1.82 |
(b) |
$ |
0.61 |
(c) |
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - diluted |
|
60,926,604 |
|
63,739,910 |
|
61,093,960 |
|
65,069,901 |
| ||||
(a) Includes $5,270 in restructuring costs ($3,392 net of tax) and favorable income tax items totaling $700 during the three months ended September 30, 2011.
(b) Includes $15,702 in restructuring costs ($10,106 net of tax) and favorable income tax items totaling $700 during the nine months ended September 30, 2011.
(c) Includes $119,229 in asset impairment charges ($73,922 net of tax) and favorable income tax items totaling $10,352 during the three and nine months ended September 30, 2010.
COVANCE INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2011 and DECEMBER 31, 2010
(Dollars in thousands)
|
|
|
September 30 |
|
December 31 |
| ||
|
|
|
2011 |
|
2010 |
| ||
|
|
|
(UNAUDITED) |
|
|
| ||
|
ASSETS |
|
|
|
|
| ||
|
Current Assets: |
|
|
|
|
| ||
|
Cash & cash equivalents |
|
$ |
399,695 |
|
$ |
377,223 |
|
|
Accounts receivable, net |
|
284,769 |
|
261,160 |
| ||
|
Unbilled services |
|
122,330 |
|
90,729 |
| ||
|
Inventory |
|
82,085 |
|
82,924 |
| ||
|
Deferred income taxes |
|
40,318 |
|
35,648 |
| ||
|
Prepaid expenses and other current assets |
|
129,537 |
|
98,127 |
| ||
|
Total Current Assets |
|
1,058,734 |
|
945,811 |
| ||
|
|
|
|
|
|
| ||
|
Property and equipment, net |
|
856,778 |
|
843,983 |
| ||
|
Goodwill, net |
|
127,779 |
|
127,653 |
| ||
|
Other assets |
|
51,625 |
|
48,095 |
| ||
|
Total Assets |
|
$ |
2,094,916 |
|
$ |
1,965,542 |
|
|
|
|
|
|
|
| ||
|
LIABILITIES and STOCKHOLDERS’ EQUITY |
|
|
|
|
| ||
|
Current Liabilities: |
|
|
|
|
| ||
|
Accounts payable |
|
$ |
40,280 |
|
$ |
34,079 |
|
|
Accrued payroll and benefits |
|
125,084 |
|
107,572 |
| ||
|
Accrued expenses and other current liabilities |
|
111,510 |
|
97,395 |
| ||
|
Unearned revenue |
|
181,613 |
|
186,301 |
| ||
|
Short-term debt and current portion of long-term debt |
|
90,000 |
|
45,000 |
| ||
|
Income taxes payable |
|
14,167 |
|
28,827 |
| ||
|
Total Current Liabilities |
|
562,654 |
|
499,174 |
| ||
|
|
|
|
|
|
| ||
|
Long-term debt |
|
— |
|
87,500 |
| ||
|
Deferred income taxes |
|
25,818 |
|
30,531 |
| ||
|
Other liabilities |
|
70,449 |
|
68,516 |
| ||
|
Total Liabilities |
|
658,921 |
|
685,721 |
| ||
|
|
|
|
|
|
| ||
|
Stockholders’ Equity: |
|
|
|
|
| ||
|
Common stock |
|
780 |
|
774 |
| ||
|
Paid-in capital |
|
677,777 |
|
639,341 |
| ||
|
Retained earnings |
|
1,484,754 |
|
1,373,705 |
| ||
|
Accumulated other comprehensive income |
|
14,691 |
|
277 |
| ||
|
Treasury stock |
|
(742,007 |
) |
(734,276 |
) | ||
|
Total Stockholders’ Equity |
|
1,435,995 |
|
1,279,821 |
| ||
|
Total Liabilities and Stockholders’ Equity |
|
$ |
2,094,916 |
|
$ |
1,965,542 |
|
COVANCE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011 AND 2010
(Dollars in thousands)
(UNAUDITED)
|
|
|
Nine Months Ended September 30 |
| ||||
|
|
|
2011 |
|
2010 |
| ||
|
Cash flows from operating activities: |
|
|
|
|
| ||
|
Net income |
|
$ |
111,049 |
|
$ |
39,876 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization |
|
79,291 |
|
77,105 |
| ||
|
Asset impairment charges |
|
— |
|
119,229 |
| ||
|
Non-cash compensation expense associated with employee benefit and stock compensation plans |
|
29,305 |
|
24,815 |
| ||
|
Deferred income tax benefit |
|
(9,680 |
) |
(53,185 |
) | ||
|
Loss on disposal of property and equipment |
|
431 |
|
961 |
| ||
|
Equity investee earnings |
|
(305 |
) |
(926 |
) | ||
|
Changes in operating assets and liabilities, net of business acquired: |
|
|
|
|
| ||
|
Accounts receivable |
|
(23,396 |
) |
3,442 |
| ||
|
Unbilled services |
|
(31,601 |
) |
(6,381 |
) | ||
|
Inventory |
|
839 |
|
(1,388 |
) | ||
|
Accounts payable |
|
6,184 |
|
(1,439 |
) | ||
|
Accrued liabilities |
|
31,505 |
|
(3,577 |
) | ||
|
Unearned revenue |
|
(4,688 |
) |
(17,394 |
) | ||
|
Income taxes payable |
|
(13,988 |
) |
362 |
| ||
|
Other assets and liabilities, net |
|
(33,992 |
) |
7,658 |
| ||
|
Net cash provided by operating activities |
|
140,954 |
|
189,158 |
| ||
|
|
|
|
|
|
| ||
|
Cash flows from investing activities: |
|
|
|
|
| ||
|
Capital expenditures |
|
(86,289 |
) |
(100,488 |
) | ||
|
Acquisition of business |
|
(411 |
) |
— |
| ||
|
Other, net |
|
201 |
|
73 |
| ||
|
Net cash used in investing activities |
|
(86,499 |
) |
(100,415 |
) | ||
|
|
|
|
|
|
| ||
|
Cash flows from financing activities: |
|
|
|
|
| ||
|
Net borrowings under revolving credit facility |
|
55,000 |
|
— |
| ||
|
Repayments under long-term debt |
|
(97,500 |
) |
— |
| ||
|
Stock issued under employee stock purchase and option plans |
|
8,465 |
|
12,640 |
| ||
|
Purchase of treasury stock |
|
(7,731 |
) |
(5,601 |
) | ||
|
Net cash (used in) provided by financing activities |
|
(41,766 |
) |
7,039 |
| ||
|
|
|
|
|
|
| ||
|
Effect of exchange rate changes on cash |
|
9,783 |
|
3,773 |
| ||
|
|
|
|
|
|
| ||
|
Net change in cash and cash equivalents |
|
22,472 |
|
99,555 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents, beginning of period |
|
377,223 |
|
289,469 |
| ||
|
|
|
|
|
|
| ||
|
Cash and cash equivalents, end of period |
|
$ |
399,695 |
|
$ |
389,024 |
|
COVANCE INC.
GAAP to Pro Forma Reconciliation
Q3 2011
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
| ||||||
|
|
|
GAAP |
|
Restructuring |
|
Income Tax |
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net revenues |
|
$ |
543,254 |
|
|
|
|
|
$ |
543,254 |
| ||
|
Reimbursable out-of-pocket expenses |
|
35,622 |
|
|
|
|
|
35,622 |
| ||||
|
Total revenues |
|
578,876 |
|
— |
|
— |
|
578,876 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of revenue |
|
383,347 |
|
|
|
|
|
383,347 |
| ||||
|
Reimbursable out-of-pocket expenses |
|
35,622 |
|
|
|
|
|
35,622 |
| ||||
|
Selling, general and administrative |
|
81,292 |
|
(4,216 |
) |
|
|
77,076 |
| ||||
|
Depreciation and amortization |
|
27,592 |
|
(1,054 |
) |
|
|
26,538 |
| ||||
|
Total costs and expenses |
|
527,853 |
|
(5,270 |
) |
— |
|
522,583 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) from operations |
|
51,023 |
|
5,270 |
|
|
|
56,293 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other expense, net: |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense (income), net |
|
343 |
|
|
|
|
|
343 |
| ||||
|
Foreign exchange transaction loss, net |
|
777 |
|
|
|
|
|
777 |
| ||||
|
Other expense, net |
|
1,120 |
|
— |
|
— |
|
1,120 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) before taxes and equity investee earnings |
|
49,903 |
|
5,270 |
|
|
|
55,173 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Tax expense (benefit) |
|
9,781 |
|
1,878 |
|
700 |
|
12,359 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Equity investee earnings |
|
547 |
|
|
|
|
|
547 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) |
|
$ |
40,669 |
|
$ |
3,392 |
|
$ |
(700 |
) |
$ |
43,361 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic earnings (loss) per share |
|
$ |
0.68 |
|
$ |
0.06 |
|
$ |
(0.01 |
) |
$ |
0.73 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - basic |
|
59,695,336 |
|
59,695,336 |
|
59,695,336 |
|
59,695,336 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted earnings (loss) per share |
|
$ |
0.67 |
|
$ |
0.06 |
|
$ |
(0.01 |
) |
$ |
0.71 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - diluted |
|
60,926,604 |
|
60,926,604 |
|
60,926,604 |
|
60,926,604 |
| ||||
(1) Represents costs incurred in connection with capacity rationalization, streamlining operations and other cost reduction actions.
(2) Represents favorable resolutions of income tax matters.
COVANCE INC.
GAAP to Pro Forma Reconciliation
Q3 2010
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
| |||||||||
|
|
|
GAAP |
|
Asset |
|
Income Tax |
|
Inclusion of |
|
Pro Forma |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net revenues |
|
$ |
477,022 |
|
|
|
|
|
|
|
$ |
477,022 |
| |||
|
Reimbursable out-of-pocket expenses |
|
36,258 |
|
|
|
|
|
|
|
36,258 |
| |||||
|
Total revenues |
|
513,280 |
|
— |
|
— |
|
— |
|
513,280 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Cost of revenue |
|
337,698 |
|
|
|
|
|
|
|
337,698 |
| |||||
|
Reimbursable out-of-pocket expenses |
|
36,258 |
|
|
|
|
|
|
|
36,258 |
| |||||
|
Selling, general and administrative |
|
70,731 |
|
|
|
|
|
|
|
70,731 |
| |||||
|
Depreciation and amortization |
|
26,105 |
|
|
|
|
|
|
|
26,105 |
| |||||
|
Asset impairment charges |
|
119,229 |
|
(119,229 |
) |
|
|
|
|
— |
| |||||
|
Total costs and expenses |
|
590,021 |
|
(119,229 |
) |
— |
|
— |
|
470,792 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
(Loss) income from operations |
|
(76,741 |
) |
119,229 |
|
— |
|
— |
|
42,488 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Other expense (income), net: |
|
|
|
|
|
|
|
|
|
|
| |||||
|
Interest (income) expense, net |
|
(236 |
) |
|
|
|
|
|
|
(236 |
) | |||||
|
Foreign exchange transaction loss (gain), net |
|
681 |
|
|
|
|
|
|
|
681 |
| |||||
|
Other expense (income), net |
|
445 |
|
— |
|
— |
|
— |
|
445 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
(Loss) income before taxes and equity investee earnings |
|
(77,186 |
) |
119,229 |
|
— |
|
— |
|
42,043 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Tax (benefit) expense |
|
(46,003 |
) |
45,307 |
|
10,352 |
|
— |
|
9,656 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Equity investee earnings |
|
253 |
|
|
|
|
|
|
|
253 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Net (loss) income |
|
$ |
(30,930 |
) |
$ |
73,922 |
|
$ |
(10,352 |
) |
$ |
— |
|
$ |
32,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Basic (loss) earnings per share |
|
$ |
(0.49 |
) |
$ |
1.16 |
|
$ |
(0.16 |
) |
|
|
$ |
0.51 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted average shares outstanding - basic |
|
63,739,910 |
|
63,739,910 |
|
63,739,910 |
|
|
|
63,739,910 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Diluted (loss) earnings per share |
|
$ |
(0.49 |
) |
$ |
1.16 |
|
$ |
(0.16 |
) |
$ |
(0.01 |
) |
$ |
0.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
|
Weighted average shares outstanding - diluted |
|
63,739,910 |
|
63,739,910 |
|
63,739,910 |
|
1,270,798 |
(2) |
65,010,708 |
(2) | |||||
(1) Represents favorable resolutions of income tax matters.
(2) Reflects inclusion of impact of common stock equivalents in computation of diluted earnings per share as GAAP loss transitions to Pro Forma income.
COVANCE INC.
GAAP to Pro Forma Reconciliation
YTD Q3 2011
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
| ||||||
|
|
|
GAAP |
|
Restructuring |
|
Income Tax |
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net revenues |
|
$ |
1,563,460 |
|
|
|
|
|
$ |
1,563,460 |
| ||
|
Reimbursable out-of-pocket expenses |
|
90,601 |
|
|
|
|
|
90,601 |
| ||||
|
Total revenues |
|
1,654,061 |
|
— |
|
— |
|
1,654,061 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of revenue |
|
1,095,199 |
|
|
|
|
|
1,095,199 |
| ||||
|
Reimbursable out-of-pocket expenses |
|
90,601 |
|
|
|
|
|
90,601 |
| ||||
|
Selling, general and administrative |
|
247,292 |
|
(13,838 |
) |
|
|
233,454 |
| ||||
|
Depreciation and amortization |
|
79,291 |
|
(1,864 |
) |
|
|
77,427 |
| ||||
|
Total costs and expenses |
|
1,512,383 |
|
(15,702 |
) |
— |
|
1,496,681 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) from operations |
|
141,678 |
|
15,702 |
|
|
|
157,380 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other expense, net: |
|
|
|
|
|
|
|
|
| ||||
|
Interest expense (income), net |
|
1,640 |
|
|
|
|
|
1,640 |
| ||||
|
Foreign exchange transaction loss, net |
|
892 |
|
|
|
|
|
892 |
| ||||
|
Other expense, net |
|
2,532 |
|
— |
|
— |
|
2,532 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income (loss) before taxes and equity investee earnings |
|
139,146 |
|
15,702 |
|
|
|
154,848 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Tax expense (benefit) |
|
28,402 |
|
5,596 |
|
700 |
|
34,698 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Equity investee earnings |
|
305 |
|
|
|
|
|
305 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income (loss) |
|
$ |
111,049 |
|
$ |
10,106 |
|
$ |
(700 |
) |
$ |
120,455 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic earnings (loss) per share |
|
$ |
1.86 |
|
$ |
0.17 |
|
$ |
(0.01 |
) |
$ |
2.02 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - basic |
|
59,596,294 |
|
59,596,294 |
|
59,596,294 |
|
59,596,294 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted earnings (loss) per share |
|
$ |
1.82 |
|
$ |
0.17 |
|
$ |
(0.01 |
) |
$ |
1.97 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - diluted |
|
61,093,960 |
|
61,093,960 |
|
61,093,960 |
|
61,093,960 |
| ||||
(1) Represents costs incurred in connection with capacity rationalization, streamlining operations and other cost reduction actions.
(2) Represents favorable resolutions of income tax matters.
COVANCE INC.
GAAP to Pro Forma Reconciliation
YTD Q3 2010
(Dollars in thousands, except per share data)
(UNAUDITED)
|
|
|
|
|
Adjustments |
|
|
| ||||||
|
|
|
GAAP |
|
Asset |
|
Income Tax |
|
Pro Forma |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net revenues |
|
$ |
1,434,117 |
|
|
|
|
|
$ |
1,434,117 |
| ||
|
Reimbursable out-of-pocket expenses |
|
84,901 |
|
|
|
|
|
84,901 |
| ||||
|
Total revenues |
|
1,519,018 |
|
— |
|
— |
|
1,519,018 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
|
Cost of revenue |
|
1,001,574 |
|
|
|
|
|
1,001,574 |
| ||||
|
Reimbursable out-of-pocket expenses |
|
84,901 |
|
|
|
|
|
84,901 |
| ||||
|
Selling, general and administrative |
|
217,576 |
|
|
|
|
|
217,576 |
| ||||
|
Depreciation and amortization |
|
77,105 |
|
|
|
|
|
77,105 |
| ||||
|
Asset impairment charges |
|
119,229 |
|
(119,229 |
) |
|
|
— |
| ||||
|
Total costs and expenses |
|
1,500,385 |
|
(119,229 |
) |
— |
|
1,381,156 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
(Loss) income from operations |
|
18,633 |
|
119,229 |
|
— |
|
137,862 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Other expense (income), net: |
|
|
|
|
|
|
|
|
| ||||
|
Interest (income) expense, net |
|
(378 |
) |
|
|
|
|
(378 |
) | ||||
|
Foreign exchange transaction loss (gain), net |
|
2,595 |
|
|
|
|
|
2,595 |
| ||||
|
Other expense (income), net |
|
2,217 |
|
— |
|
— |
|
2,217 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
(Loss) income before taxes and equity investee earnings |
|
16,416 |
|
119,229 |
|
— |
|
135,645 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Tax (benefit) expense |
|
(22,534 |
) |
45,307 |
|
10,352 |
|
33,125 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Equity investee earnings |
|
926 |
|
|
|
|
|
926 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net (loss) income |
|
$ |
39,876 |
|
$ |
73,922 |
|
$ |
(10,352 |
) |
$ |
103,446 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic (loss) earnings per share |
|
$ |
0.63 |
|
$ |
1.16 |
|
$ |
(0.16 |
) |
$ |
1.63 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - basic |
|
63,601,302 |
|
63,601,302 |
|
63,601,302 |
|
63,601,302 |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Diluted (loss) earnings per share |
|
$ |
0.61 |
|
$ |
1.14 |
|
$ |
(0.16 |
) |
$ |
1.59 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Weighted average shares outstanding - diluted |
|
65,069,901 |
|
65,069,901 |
|
65,069,901 |
|
65,069,901 |
| ||||
(1) Represents favorable resolutions of income tax matters.